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Uber Policy White Paper

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[…]

October 13,
2015
Posted by Molly
Categories:
Headlines,
Impact

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NEWS:UBER GLOBAL 

Uber and
Carnegie Mellon
University: A
Deeper
Partnership
Today, we are excited
to announce that Uber
will give $5.5M to
support a new robotics
Almost three years ago, Uber launched its
faculty chair as well as
transportation technology platform in San
three fellowships at
Francisco. As ‘Everyone’s Private Driver’, Uber
CMU. This gift is part
provides city residents with a convenient and
of a partnership we
efficient way to request transportation services
announced earlier this
from existing transportation providers. Although
year. In addition, we’re
Uber does not own cars and does not employ
pumped to be part of a
drivers, Uber has helped create tens of thousands
growing innovation
of jobs for drivers through its local transportation
ecosystem in
partners – and we have helped people get around
Pittsburgh that
in major cities around the world.
includes world leading
research institutions
Over the last year, new startups have sought to
and companies, as well
compete with Uber by offering transportation
as an increasing
services without traditional commercial insurance
number of start-ups.
or licensing. Uber refrained from participating in
this technology sector — known as ridesharing — September 9,
due to regulatory risk that ridesharing drivers may 2015
be subject to fines or criminal misdemeanors for Posted by

participating in non-licensed transportation for Travis

Categories:
compensation.
Headlines,
Impact
In most cities across the country, regulators have
chosen not to enforce against non-licensed

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NEWS:UBER GLOBAL 
regulatory ambiguity leading to one-sided
competition which Uber has not engaged in to its
own disadvantage. It is this ambiguity which we are
looking to address with Uber’s new policy on
ridesharing:

1. Uber will roll out ridesharing on its existing

platform in any market where the regulators
have given tacit approval;

2. In the absence of regulatory leadership, Uber

will implement safeguards in terms of safety
and insurance that will go above and beyond
what local regulatory bodies have in place for
commercial transportation.

In the face of this challenge, Uber could have

chosen to do nothing. We could have chosen to use
regulation to thwart our competitors. Instead, we
chose the path that reflects our company’s core: we
chose to compete.

The purpose of this white paper is to:

a) provide recommendations to policymakers to
promote innovation in transportation services while
ensuring the safety of the public;
b) introduce a principled approach to ridesharing,
given the regulatory complexities;
c) envision what the law and/or regulatory
framework could look like for ridesharing especially
as it relates to safety.

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NEWS:UBER GLOBAL 

Uber’s success has not gone unnoticed. The

incumbent taxi industry, widely reported to be
corrupt, anti-competitive, and generally acting
against the interests of the public and its struggling
drivers, has launched a full frontal campaign to
slow and/or shut down Uber. Their desperate tactics
went to new heights last week with a claim that
Uber discriminates against cancer patients. Despite
these challenges, we continue to operate in cities
across the U.S. because our technology respects
existing regulation and promotes legal
transportation services.

On the other end of the spectrum, a host of clone

companies have emerged, most notably Lyft and
Sidecar, whose goal is to offer incredibly low-cost
transportation by working exclusively with
unlicensed, non-commercially insured vehicles and
drivers. This is quite different from Uber, which
works almost exclusively with commercially
licensed, insured and regulated entities (the only
case where we haven’t is in California, where we
have obtained explicit written permission by the CA
Public Utilities Commission to do so). Lyft and
Sidecar call their approach “ridesharing”.

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NEWS:UBER GLOBAL 

In theory, ridesharing is generally good for cities

and for society as a whole: cheaper, more reliable
transportation for city residents, and more jobs for
drivers. But given existing regulations, the
Lyft/Sidecar approach is quite aggressive. The bet
they are making is two-fold:

1. Uber, already a market leader, is too weary to

enter the non-licensed market in the face of
existing regulatory scrutiny.

2. Regulators for the most part will be unable to

act or enforce in time to stop them before
they have a critical mass of consumer support.

The first assumption has paid off nicely for Sidecar

and Lyft. Uber already gets so much regulatory heat
in markets where Uber’s approach is clearly legal.
In markets across the country, taxi companies have
been pushing regulators and legislators to protect
them by proposing new regulations that outlaw
Uber. With such strong regulatory language against
the ‘ridesharing’ approach, Uber restrained from
competing with Lyft and Sidecar in the non-licensed
transportation space for over a year.

The second bet the ridesharing companies made is

also proving out. In the majority of cities that they
have rolled out, the regulators have chosen not to
enforce against them.

With Uber’s approach, our partners have to buy

cars, purchase commercial insurance, and spend
thousands of dollars in order to get commercially
licensed after going through mounds of red tape. In
the ridesharing model, a driver can walk into their

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NEWS:UBER GLOBAL 
fees to get licensed, and without months of wading
through bureaucratic red tape.

So over the last year we’ve stayed out of the

ridesharing fray due to perceived regulatory risk
and watched two competitors roll out in a few cities
in which we already operate, without nearly the
same level of constraints or costs, offering a far
cheaper product.

The regulators’ response has been mixed. In Austin

and in Philadelphia, regulators have chosen to
aggressively enforce against non-licensed
transportation. This has stifled innovation, but also
minimized regulatory ambiguity.

In New York, Seattle, Chicago, Boston, and California

the regulators have chosen NOT to enforce existing
regulations against non-licensed operators. This is
presumably for one or more of the following
reasons:

1. The regulators believe that old rules don’t

apply to transportation apps with non-licensed

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NEWS:UBER GLOBAL 
new rules to address this new sector and in
the meantime they will see where the new
innovation leads.

3. Regulators are exercising their discretionary

power to enforce or not enforce their regs,
and therefore, choosing to tacitly approve
ridesharing by not enforcing against
ridesharing.

To their credit, the lack of enforcement shows at

least some embrace of this kind of transportation
innovation. But the lack of real clarity has created
massive regulatory ambiguity. Without clear
guidance or enforcement, this ambiguity has led to
one-sided competition in which Uber has not
engaged to its own disadvantage. It is this
ambiguity which we are looking to address with
Uber’s new policy on ridesharing.

Uber will roll out ridesharing on its existing

platform in any market where the regulators have
tacitly approved doing so.

1. If a competitor is operating for 30 days

without direct enforcement against

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NEWS:UBER GLOBAL 
activity.

2. If clear and consistent enforcement has taken

place within 30 days of a competitor rolling
out a ridesharing service, then Uber will not
roll out its platform for ridesharing in that
jurisdiction.

In the absence of regulatory clarity, Uber will

implement safeguards in terms of safety and
insurance that will go beyond what local regulatory
bodies have in place for commercial transportation.

1. At minimum, there will be a $1,000,000

per-incident insurance policy applicable to
ridesharing trips. This insurance applies to any
ridesharing trip requested through the Uber
technology platform.

2. Extensive and strict background checks will be

performed on any ridesharing transportation
provider allowed on the Uber platform. The
criteria for which a driver will be disqualified
will be stricter than what any existing local
regulatory body already has in place for
commercial transportation providers.

Innovation and consumer safety are at the core of

Uber’s culture. Until this policy shift, Uber hesitated
to engage in a market perceiving extreme
regulatory risk. Finding the principles for
engagement with such risk in this market was

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NEWS:UBER GLOBAL 
consumers was taken care of while regulators catch
up to the innovation they are letting flourish. We
look forward to ridesharing spreading across the
country but look to do so only after first getting a
read from regulators on this new relaxed approach
to transportation licensing and enforcement.

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